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Age is a State of Mind

Qualifying for a mortgage loan can be a complex process that Orion’s brokers, and our AEs, help to make simpler. Many of our broker’s borrowers are retired, and if they are retired, qualifying the income for loan approval can add a layer of challenge to the process. But there are numerous avenues to explore depending upon where your client’s income is derived and how it is allotted.

Many retired clients often have multiple sources of income plus assets. Some income is easy to show, prove and qualify. For instance, social security and pension income from a prior employer or union, are easy to verify through benefit statements, tax returns and bank statements.

Another usable source are monthly payments from an annuity or life insurance policy. This income can be used by Orion’s underwriters after verifying that the amount that the income received will be a regular amount, with enough assets in the policy to ensure payments for at least three more years.

Orion knows that a primary source of income for retirees are assets from retirement or investment accounts. The most common is an IRA that consists of funds accumulated while working and paid tax free into a 401(k) or other type of retirement account. Some retirees only take the "Required Minimum Withdraws" (RMD) from their retirement account(s), others set up a regular monthly, quarterly or annual payment that is greater than their RMD. If a client has a regular withdraw amount established, that amount is what most lenders use as qualifying income, provided that the client can prove the amount is constant and that they have at least three years of withdraws in their retirement account using a designated formula.

Some of our broker’s retired clients have a large amount of money in cash or investment accounts that are not retirement accounts, but money saved, inherited, or are the proceeds from the sale of other assets. In certain instances, a process called "asset depletion” can be utilized. Asset depletion guidelines enable us to take a percentage of these assets and then divide by the total number of months in the mortgage to obtain a monthly income amount.

Other usable common sources of income include rental income, distributions from an inherited IRA or annuity or income from current employment.

If a client finds themselves in a situation in which they want to sell their current home and purchase a new one, or refinance their existing home but are not able to qualify for a traditional mortgage, there are other options Orion offers! Ask our AE.


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